Bank says key stock market index set to hit 15,000

Poweredby strong energy and commodity stocks, the TSX is set to gain about 1,000 points and hit 15,000 by year end, CIBC World Markets says.

The bank issued its latest Canadian Portfolio Strategy Outlook Thursday. It said that although the TSX was volatile in June over investor concerns about looming inflation and interest rates, strong market fundamentals would likely outweigh those worries.

Last week the TSX lost about 500 points.On Thursday it wastradingaround the 14,000level.

Overall in2007, the benchmark indexhas risen abouteight per cent. If CIBC's prediction proves true, theTSX would gain another 6.6 per cent over the remainder of the year.

"While banks and other interest-sensitive stocks have taken it on the chin, most of the adjustment in bond yields should be behind us," said Jeff Rubin, chief strategist and chief economist at CIBC World Markets.

"A summer hike from the Bank of Canada is unlikely to mark the beginning of a full-fledged tightening cycle, in view of the moderating impact of a rising Canadian dollar on both domestic growth and import prices."

The report also said that crude oil prices are likely to continue to rise, sparking mergers and acquisitions in the energy sector.

On Thursday, the price of Brent crude in London surged nearly $2 U.S. to nearly $75 U.S. a barrel.

"While a final verdict on the subprime market won't be known for several quarters, the global economic outlook has seldom been brighter, bringing strong support to energy and most commodity markets," Rubin said.